Economic evaluation of administration systems in the context of management business processes reengineering
Date
2019-02-26
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Lviv Politechnic Publishing House
Abstract
The article deals with the peculiarities
of an economic evaluation of administrative systems in
the context of management business processes
reengineering. In particular, methodological approaches
to the economic evaluation of such systems are
described and characterized. It is concluded that under
present conditions most of the projects on construction
or improvement of administrative systems belong to the
category of investment projects, which, accordingly, are
related to investment costs. Consequently, this
necessitates the implementation of commonly used in
investment management methodical approaches for the
economic evaluation of the investments’ efficiency in
the administration systems. The main approaches to the
economic evaluation of administrative systems in the
frameworks of management business processes
reengineering are outlined and characterized. They
include traditional financial methods, probabilistic
methods, qualitative analysis tools, financial, qualitative
or combined models, portfolio analysis, budget
approach, project approach. Thus, the traditional
financial methods of the economic evaluation of the
administration systems in the management of enterprises
provide for the calculation of the payback period, the net
present value, the internal or average rate of return, the
profitability index, the level of investments’ return, etc.
Among the methods and approaches to solving the
problem, the estimated Total Cost of Ownership (TCO),
IT Scorecard (consideration of customer projections,
finance, processes and training and development in the
frameworks of administrative processes in the enterprise
and administration systems) on enterprise and
administration systems), Activity Based Costing (ABC),
Cost/Schedule Control Systems Criteria (C/SCSC),
Applied Information Economics (AIE), Total Value of
Opportunities (TVO), Total Economic Impact (TEI),
Rapid Economic Justification (REJ), etc. The hypothesis
about the influence of administrative systems on the
resulting indicators of a business entity was confirmed
based on the results of calculations. This problem has
been solved using correlation-regression analysis. Net
income from sales of products (which is known to be
one of the most representative absolute indicators of the
economic efficiency of production and economic
activity of the enterprise) was selected as the resulting
(or dependent) variable. Among the independent
variables (factor characteristics), the indicators of the
level of administrative systems formation (R ) and the
level of their stability (R ) were chosen to solve the
problem. Appropriate calculations to verify the
hypothesis were done for the activities of a number of
domestic business entities.
Description
Keywords
administration, business process, economic evaluation, reengineering, system, management
Citation
Kuzmin O. Economic evaluation of administration systems in the context of management business processes reengineering / O. Kuzmin, V. Ovcharuk, V. Zhezhukha // Economics, Entrepreneurship, Management. — Lviv : Lviv Politechnic Publishing House, 2019. — Vol 6. — No 1. — P. 1–12.